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Debts Divided in Divorce

March 4, 2014

Typically in a divorce decree the state court will divide all the assets and debts of the couple. The divorce decree is a state order that does control who is responsible for the debt, but it unfortunately does not do much to the rights of a third party creditors. This means the creditor can continue to collect against a former spouse even if that debt was assigned to the other spouse.

If one spouse is making the regular payments on the debt the creditor shouldn’t contact the other spouse. If, however, no one is making payments or making late payments the creditor can, and often will, contact both former spouses.

A spouse may be able to sue their former spouse to enforce the divorce decree and attempt to recoup some of the payments made to the creditor. This lawsuit would only result in an award in money damages and may not be collectable if the former spouse has no assets or income that can be reached.

This typically leaves one spouse with the requirement to make payments or seek out other debt relief options such as bankruptcy. If one spouse files for bankruptcy and has their obligation discharged it will not discharge any of the obligations for the former spouse. An issue may also arise if a spouse files for chapter 13 bankruptcy debt that was divided by a divorce decree may be included in a the chapter 13 plan. If the debt is a secured debt the spouse can surrender the debt and have it discharged leaving their former spouse responsible and taking them off the note.

If you have found yourself being forced to pay for an ex-spouses debt that was assigned to him/her in a divorce decree you should contact the attorneys at Fears |Nachawati for a free consultation. Contact us at 1.866.705.7584 or send an email to fears@fnlawfirm.com.

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